Contractor Beware – Do Not Pull Permits for Others
If you have any type of contractor’s license, listen closely! Being paid to use your contractor’s license to pull a permit for others may sound like a profitable proposition but is a transaction fraught with risk and one that you should avoid.
The Florida Legislature enacted Section 489 to protect the public health, safety and welfare by requiring significant construction work be performed by licensed contractors. To ensure that work is completed by licensed contractors, Section 489, Florida Statutes, provides that certain acts, such as “renting your license,” may be prosecuted as crimes and the Construction Industry Licensing Board has multiple sanctions at its disposal. The licensed contractor must have a contract to perform the work specified in the permit you pull; otherwise you are “renting your license.”
According to Section 489.127(4), Florida Statute, pulling a permit for construction work performed by others is punishable as a misdemeanor. A second violation of this rule is punishable as a felony. Also, you could be subject to discipline by the Construction Industry Licensing Board for aiding and abetting unlicensed activity. These penalties can be quite severe such as license revocation; restitution to the owner for harm incurred; and fines up to $10,000.
A licensed contractor may “qualify” the business that has the contract to perform the work. To become the “qualifying agent” a licensed contractor must follow the procedures provided in Section 489.119(2), Florida Statute, which includes, among other things, being employed by the business or owning the business and submitting an application for approval by the Licensing Board. The mere act of pulling a permit is not enough to make a licensed contractor the qualifying agent for the construction company that performs the work.
The privilege of qualifying a business brings with it a duty to supervise the work. The qualifying agent has a statutory duty to supervise the contracted work to make sure it is completed in accordance with the applicable building code and up to industry standards. If you are only pulling the permit but not supervising the work, then you are not around to make sure the work in performed properly. Additionally, the qualifiers must be responsible for the operations of the business being qualified and have control over all financial matters of the business, not simply the project he “permitted.” However, violation of the Section 489 duty to supervise does not create a private right of action against the qualifying agent. Nevertheless, an injured party may have a statutory cause of action against the licensed contractor under Section 553.84, if the company committed a violation of the applicable building code and it can be the basis for a negligence claim.
If an owner approaches you to pull a permit for a job that was started by an unlicensed contractor, you have two legal options: (1) go through the process of becoming the qualifying agent for the unlicensed contractor before pulling the permit and make sure you supervise their work; or (2) have the owner cancel his contract with the unlicensed contractor and contract with you in his place – do not allow the unlicensed contractor to continue performing work under your permit. The risk is not worth the reward.
For more information, see our LinkedIn page.
Read more about Christopher M. Cobb here.